Michigan Sales Tax On Software Maintenance – Verified Source

Specific charges for technical support or for adapting prewritten software to a user's needs are exempt if they are separately stated and identified on the invoice.

Maintenance contracts for custom software (designed for a specific user's needs) are generally considered non-taxable services. Critical Factors and Exemptions

Software delivered via physical media or downloaded in full is taxable as tangible property. Conversely, Software as a Service (SaaS) accessed purely via a web browser (with no downloaded code) is typically exempt . Michigan Sales Tax On Software Maintenance

Out-of-state vendors must collect tax if they have a physical presence or meet economic thresholds ($100,000 in annual sales or 200+ transactions in Michigan).

If an optional agreement for prewritten software includes future updates or "tangible deliverables" (like new code versions), it may become subject to tax . Specific charges for technical support or for adapting

Agreements that strictly provide services like troubleshooting, technical assistance, or helpdesk access are generally exempt from tax.

Michigan's 6% sales and use tax applies to "tangible personal property," which the state defines to include (canned) computer software. Maintenance agreements follow these specific triggers: Conversely, Software as a Service (SaaS) accessed purely

Are you currently reviewing a or trying to determine if a specific SaaS product with a desktop agent is taxable?